Rice Supply Situation

Rice is a staple food of half of the world’s population. As we produce close to 163 mt(Million Tonnes) of rice per year, we play a vital role in the international rice market . Hence any happenings in the Indian agricultural sector will have an impact on the global market.

On the backdrop of poor monsoon across india and the recent flood in the southern india will surely have a cut on the khariff production figures. After a record of 99mt output in last years khariff, we are now estimating to produce 81mt this year. At the moment shortfall of substantial 18mt is a cause of concern. We might face a worst rice supply situation in the days to come

What government will do:

• Regulate the rice market: Controlling inventory build up under ESMA will ease out supply for some time, but it is going to kill traders & millers in the market.
• Import of rice: As of now India has not participated actively in international market to procure rice. A sudden move by FCI will shore up rice prices globally as the volumes will increase rapidly.

What government should do:

• Rice @ Rs.2/kg: Rice sold at a substantial subsidised price will have lesser utility and the wastage is more. Centre should request state government to abolish such schemes for the time being.
• Substitute food: Think over promoting substitute food products like wheat, maize or other pulses.
• Increase domestic supply: improve the water availability conditions on ground to cultivate rice so that Rabi will have higher output units.
• Crop Insurance: Promote farmers to cultivate for Rabi season by assuring them with crop insurance. As most of them feel that, there will be scarcity of water in the summer season. Hence most of them have not even started seedling plots for nursery.

Every time a crisis occurs, we can not always look back to our age old strategy of regulating the traders & millers inventory in the market. We have to shift to a level, where we can address the base of the problem.

Rabi season is nearing, but water availability during this term is difficult to predict as the season gets over in summer. Hence government should design a strategy which will improve transplantion of paddy.